Thought Leadership
We think a lot about risk—and ways to manage it—in a variety of ways. From rising concerns to best practices to exposure assessments, we're sure you’ll find our expert insights valuable.
Why young adults need their own insurance
For parents, the worrying never stops, even after their grown children leave the nest. But if that worrying leads to you to keeping those newly independent adults on your insurance program, unfortunately, they will not be properly protected. It is in everybody’s best interest that children secure their own policies once they are living independently. Please do not fret if you are still insuring your children post-college; you are not alone. It is a long-held belief that parents should be responsible for covering their young adults. But it is a belief we work diligently to correct, even as we know that emotional and financial ties can remain quite strong well into adulthood. Because that powerful connection — which recent studies suggest is stronger than ever between parents and grown children — will be much better served by separating insurance policies. This action better protects your family’s assets, and thus the legacy you are building and will eventually leave to your children. It also assures that your child has protection should unforeseen scenarios in liability or auto incidents occur. Convinced? Here’s how to help your grown children make the transition to their own insurance. When should young adults transition to their own insurance? Children need their own policies as soon as they begin to live independently. We understand that “independence” can be a somewhat gray concept, clouded by ongoing familial financial support, additional schooling, and the like. That said, we believe it’s best to err on the side of too soon because you don’t want to wait until it’s too late. Once a child has graduated from school and moved to a permanent address that is not their parents’ they can no longer be considered a dependent. This is true whether they are working, part-time or full-time, or working and attending graduate school. Only if they go straight to graduate school, living in your house during breaks, might they still be covered by their parents’ policies. Even in that case, though, it’s best to confirm their eligibility with your insurance advisor. Why individual insurance is crucial for young adults. Ours is a litigious society, with too many people looking for reasons to sue anyone with means — or anyone who has parents with means. So, your child should have their own liability coverage when they are no longer protected by yours. Liability suits are complicated and potentially costly, whether the case has merit or not. Even if a suit has no cause, and assuming the claim falls within the boundaries afforded by your policy, your child will need legal representation to argue for it to be dismissed. The policies we recommend pay those fees. Similarly, they will redress damages should your child be found negligent. This will be useful to them regardless of how much — or how little — they earn. In fact, though it may seem reasonable to conclude that young adults with no significant assets can do without a holistic insurance program, that is not a prudent calculation. In some cases, judgements can be made that one cannot immediately pay placing wages and other assets at risk. Keep in mind that we are talking about a time of life that is full of unique exposures. Simply put, young adults are most likely to find themselves in risky situations. To take just one example, they are more likely to fall prey to cyber scams because they spend so much time online or on social media platforms. How to equip your young adult with the right insurance. 1. Renters or homeowner’s insurance Of course, if your child has purchased the home they are inhabiting — or you have purchased it for them — they will have to get homeowner’s insurance. Renting may seem a less straightforward proposition, but it’s quite simple: Regardless of the cost or contents of their residence, a renter’s insurance policy is critical because it provides access to personal liability coverage. Think of it not to replace a roomful of furniture, but rather coverage that will protect you and your assets if you’re held responsible for another person’s injuries or damage to their personal property. Young renters should also be aware that everyone sharing an apartment must carry their own policy. Coverage extends only to relatives. (Note: cohabiting partners are not family in the eyes of carriers until they are married.) 2. Automobile coverage The tendency to keep children on the family automobile policy is a problematic one, as coverage extends to them only when they are driving a family vehicle. If you have bought or gifted a car to your child, it is best to retitle it in their name and have them purchase their own policy to limit your exposure should your child get sued after an accident. For young adults who don't own or regularly use a car, we recommend a non-owned auto policy, which provides coverage for when they drive a friend’s car or are hit by a car as a pedestrian. 3. Umbrella policy This additional layer of liability above the renter’s (or home) and auto coverage ensures that your child will be properly protected against lawsuits of all kinds. We recommend a minimum of $1 million regardless of their current total assets. 4. Valuables / Collectible policy Does your child own an expensive watch or piece of jewelry? Whether they bought it themselves, received it as a gift, or have been passed it, like a family heirloom, a lost or stolen piece will not be covered once they move out of your house. Therefore, your child should procure a collections policy to properly cover these items. Just as the separation of parent and child is a healthy inevitability, the separation of their insurance policies is a financial necessity. If you are wondering about how best to approach this important transferal of responsibility, or more generally, to educate your children about risk management, your account executive is ready with the next steps. And if your newly independent child needs help securing coverage, we are here for them too. ...
Read in 5 minutesInsurance market insights from Alliant Private Client leaders
The insurance market continues to evolve, making it a fitting time to address the challenges our clients may be facing. Over the years, we have found knowledge is the best way to help clients navigate uncertainty. As such, two of our senior leadership team members have come together to share their perspectives and insights on the current state of the market and what the future may bring. Challenges in the current market What worries you the most right now? Cindy Zobian, EVP, Managing Director: While the challenging market was once contained to homeowner’s insurance, auto insurance and liability, rates are now also affected. We know this has all been very difficult for our clients. It’s understandably frustrating to see rates rise and hear about carriers leaving states. Mostly, I am always thinking about ways we can guide our clients through this market as seamlessly as possible. Alliant’s response to the market challenges So, how is Alliant meeting the moment? CZ: We’ve gotten more creative, taking an even more holistic view of our insurance programs. We’re helping clients use deductibles and co-insurance to offset the hesitance in the market; high deductibles are more attractive to insurance carriers. We’re also getting multiple carriers to share the risk, minimizing the burden of any individual carrier. The role of self-insurance There’s more talk about self-insurance these days. What do you think about this option? Mark Recht, SVP: Some clients are inquiring about this option, in which they will take on the financial risk of a possible loss instead of purchasing insurance from a carrier. We are always happy to discuss this as an approach as part of the broader risk management strategy and sometimes it is the right choice. However, ultimately most people choose to have some insurance protection because it can be difficult to reenter the insurance market once you’ve opted out. CZ: Yes, we are always going to walk clients through the good and the bad of self-insurance; in the end, we want them to be able to make the decision that is best for them. The future of the insurance market Do you see any bright spots in today’s market? CZ: We know that insurance is not the most exciting topic however, the market conditions are providing us the opportunity to have more frequent and substantive conversations with clients to develop customized programs that meet their unique needs. Clients want to understand their insurance program better, so they are better equipped to make strategic choices. And that’s a win for everyone because it leads to better overall risk management. MR: We continue to collaborate with wealth advisors and other professionals to discuss risk management because they want to ensure that their clients have risk management programs that best meet their lifestyle and unique set of needs. Understanding the complexities of the insurance market Which aspect of the market is most difficult for clients to understand? MR: The market challenges are not just impacting specific regions anymore. The current situation started in 2018 in California, after the wildfires, and then impacted Florida because of the storms. This impact is now being felt nationally, if not globally. That said, clients outside of catastrophic-prone areas are now feeling the impact of these weather-related events like ice storms, flooding, and tornadoes. Conversely, those who reside in catastrophic-prone areas do have the additional concern of carriers leaving the state, in part because some state regulations don’t allow carriers to set mutually beneficial rates. Looking ahead: The future of the insurance market What does the future look like? MR: We’re optimistic. As more reinsurance capital becomes available and insurance carriers continue to seek innovative solutions, we are finding creative ways to tackle the challenges. CZ: Yes, we’re going to continue to learn and evolve. Almost every day, we find additional ways to offset these challenges. As Cindy and Mark shared, now more than ever, the proper insurance strategy is essential, both for property protection and wealth management purposes. As you review your goals and priorities, please don’t hesitate to reach out to your insurance advisor for guidance on your portfolio. ...
Read in 4 minutesCelebrating safely: five common holiday-season risks and how to avoid them
The holiday season is a time to come together with family and friends, delight loved ones with beautiful gifts, and make beautiful memories. It’s the most wonderful time of the year, a time of gathering, giving, and joy. However, as risk managers, we often hear of not-so-festive stories—holiday scams, charitable fraud, dangerous decor, and the like—that can jeopardize these beautiful memories. To ensure everything stays joyful, we asked our experts to identify the most common risks of the holiday season and the precautions you can take to lessen the chance of them happening to you. Beware of charity scams There will always be criminals just waiting to take advantage of your best intentions. They’ll mimic authentic causes online, slightly tweaking names and logos of well-known organizations; pretend to represent legitimate causes on social media or via email; and set up phony fundraising pages in the wake of humanitarian disasters, all as a means to steal your donations. Protect yourself by… becoming more vigilant of the underhanded tactics mentioned above. Before you give, especially if you are planning a significant gift, carefully review the website and board of directors for telling gaps or elisions; check legitimacy and reputation with online databases like CharityNavigator and GuideStar, or ask representatives of the organization itself for information about its programs and fund allocation. Avoid online scams Ne’er-do-wells will also capitalize on your gift-giving generosity, using bogus texts or emails about “delivery issues” and “account problems” to steal your password or gain access to your accounts or identity. Another common scam: shady vendors on established sites like Amazon and Walmart selling inferior and counterfeit goods. Protect yourself by… carefully inspecting all links. Better yet, instead of clicking through, you should directly contact the referenced store, package carrier, or financial institution to see if they sent you the message in the first place. And you should always examine a seller’s pedigree when you purchase on social media or online platforms, to ensure you are not engaging with a subpar drop shipper. Travel with care Though most vacations leave you with only positive memories, we know that expected delights can suddenly turn otherwise. In fact, some can be forever marred by incidents of stolen valuables and travel documents, unexpected illnesses, natural disasters, and threatened or actual kidnappings. Protect yourself by… taking precautions before you take off. Back up important documents. Confirm that your travel and property insurance policies are sufficient to cover your plans and the possessions you will be taking with you. (If circumstances call for it, you may need to secure a kidnapping and ransom policy.) And when you are away, use the hotel vault — not your room safe — to secure valuables, follow local protocols and laws, and don’t post pictures or updates on social media until you are safely back home, so as not to tip off burglars to your empty residence. Minimize risk at festive gatherings Hosting holiday get-togethers is fun, especially when they go off without a hitch. Sometimes, though, the fun is tempered by an injured guest, a damaged piece of art, a drinking and driving incident, or harassment of a high-profile guest. Protect yourself by … setting parameters, literal and otherwise. Seal off areas that need to be off-limits — a perilous staircase or a room that houses a valuable collection, for example. Imagine the potential flow of guests, to ensure that a sculpture isn’t bumped accidentally. Instruct bartenders to stop serving anyone who appears to have had too much to drink, and parking valets to keep car keys out of the hands of the intoxicated. Hire security if there’s even the slightest possibility of attracting paparazzi. And most importantly, confirm that all vendors are properly insured. Protect your home Homes that become uninhabited when you retreat to another residence are more vulnerable to damage, especially as no one will be there to spot small issues before they grow bigger. Similarly, if you’ve festooned your home with candles and, decorative lights, fire, and smoke damage are a possibility. Protect yourself by … hiring a caretaker to check in on your residence to make sure the heat is properly set; water systems are shut off and there are no leaks or other damage that will prevent issues in your absence. It’s been a stressful year for many of our clients so we are committed to giving everyone the best chance to fully enjoy what should be the most enjoyable part of the season. Whether you are spending time with family, attending galas and parties, traveling to exciting locales, or spending quiet time in your mountain getaway, we want to help you make sure the experience is an invigorating one. If you have any questions or concerns about seasonal risks — or if you want to get a head start on your risk management strategy for 2024, please be in touch. ...
Read in 4 minutesFeatured topic: Family Risk Management
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